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Name % Yield⁸ Maturity % of Fund
Fixed Rate Treasury Notes 8.0000% 3.39% 7/19/2031 22.45%
Fixed Rate Treasury Notes 8.1250% 3.82% 12/16/2035 15.45%
BPI Family Savings Bank Time Deposit 0.40% 11/4/2013 10.97%
Special Deposit Account 2.0000% 1.60% 11/11/2013 6.51%
Fixed Rate Treasury Notes 6.3750% 2.58% 1/19/2022 6.31%
Retail Treasury Bonds 3.2500% 2.71% 8/15/2023 5.05%
Special Deposit Account 2.0000% 1.60% 11/29/2013 4.67%
Retail Treasury Bonds 6.1250% 3.71% 10/24/2037 3.98%
Special Deposit Account 2.0000% 1.60% 11/8/2013 3.34%
Retail Treasury Bonds 5.8750% 3.50% 3/1/2032 2.80%
Net Asset Value per Unit (NAVPU) PHP 263.22
Total Fund NAV (Mn) PHP 14,968.92
Average Daily Net Asset Value (Mn)⁴ PHP 14,753.80
Portfolio Weighted Yield to Maturity
(YTM) %, net˚ 2.50%
Current Number of Holdings 27
Information Ratio⁵ 0.04
Sharpe Ratio⁵ 1.80
Statistics (Past 5 Years) Fund Benchmark
Annualized Return (net) 11.53% 11.07%
Annualized Volatility 4.59% 4.54%
Duration (Years) 6.41 7.66
General Information
Launch Date April 25, 2005
Fund Structure Unit Investment Trust Fund
Fund Classification Long-Term Bond Fund
Fund Currency Philippine Peso
Minimum Holding Period None
Management/Trust Fee⁶ 1.00% per annum/0.25% per quarter
Custodianship Fees⁶ 0.002% per quarter
External Audit Fees⁷ 0.004%
Valuation Methodology Marked-to-Market
External Auditor Isla Lipana & Co.
Trustee Bank of the Philippine Islands
Third-Party Custodian HSBC, Ltd. (Philippines)
Dealing Cut-Off 2:00 PM
1 mo 1YR 3YRS 5YRS S.I.²
Fund 0.05 11.51 37.75 72.57 163.22
Benchmark³ 1.52 11.26 37.33 69.01 179.33
Market Review. The HSBC Philippine Local Currency Bond Index gained by 1.52% in October. The decline in yields of government securities spanned the curve, dropping by an average of 32
basis points. The 25-year rate closed the month lower by 49 basis points at 4.67%.
The US government shutdown and debt ceiling impasse weighed on local bonds in the first half of the month. Local bonds traded flat during the period even as the country secured an investment
grade credit rating from Moody’s. Bond prices then rallied after the US Congress reached a new deal to end the government’s fiscal crisis while the US Federal Reserve delayed anew the start of
the tapering of its monthly bond purchases.
The country’s solid macroeconomic fundamentals continue to support renewed buying interest for government securities. The country is now rated investment grade by all three major credit rating
agencies. Moody's cited the country’s robust economic performance, ongoing fiscal and debt consolidation, and political stability and improved governance. The Bangko Sentral ng Pilipinas held
key interest rates in its last policy meeting, maintaining overnight borrowing rate at 3.5%. Inflation forecast for this year was kept unchanged at 3% while outlook for 2014 was revised upward to 4%
from 3.9%. Meanwhile, inflation forecast for 2015 was cut to 3.4% from 3.5%. Consumer prices rose 2.7% in September due to higher food and electricity charges. Average inflation through the
first three quarters remained below-target at 2.8%. Budget deficit from the January to September reached P101.2 billion, falling below the P144.5-billion target for the period.
Market Update. The Bangko Sentral ng Pilipinas (BSP), through circular No. 813 series of 2013, has amended the market valuation of government securities. Moving forward, the valuation of
benchmark tenor bonds shall be determined by the weighted average done deals and simple average bids. For non-benchmark securities, in the absence of both weighted average done deals and
simple average bids, interpolated yields derived from reference rates shall be used. The new pricing methodology may carry with it increased volatility for the local currency fixed income holdings
of your portfolios depending on its duration.
Fund Performance. The Fund gained by 0.05% in October, missing the benchmark by 147 basis points. The underperformance was caused in part by the new valuation procedure for government
securities. It continues to outperform the benchmark on a year-to-date basis by 40 basis points, with a return of 8.97%. Portfolio duration ended below the benchmark at the close of the month.
Fund Strategy. Fund management will remain nimble as the delay in the US Federal Reserve taper adds uncertainty in the market even as inflation still print below full-year target.
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NAVPU Graph
Cumulative Performance (%)¹
Annualized Performance (%)¹
Calendar Year Performance (%)¹
Key Figures and Statistics
Investment Objective
The Fund aims to achieve capital appreciation and income growth in Philippine Peso
terms over a period of time by investing in a diversified portfolio of Philippine Peso
denominated fixed income instruments. The benchmark of the Fund is the HSBC
Local Currency Bond Index, which it aims to outperform.
Manager’s Report
The Odyssey Peso Bond Fund is a Unit Investment Trust Fund (UITF) and not a deposit account or an obligation of, or guaranteed, or insured by the Bank of the Philippine Islands or its affiliates or subsidiaries and therefore, is not insured or
governed by the Philippine Deposit Insurance Corporation (PDIC). Due to the nature of the investment, yields or potential yields cannot be guaranteed. Any income or loss arising from market fluctuations and price volatility of the securities
held by the fund/s even if invested in government securities, is for the account of the Trustor. As such, units of participation of the Trustor in the fund/s, when redeemed maybe worth more or worth less than the Trustor’s initial
investment/contribution. Historical performance, when presented, is purely for reference purposes only and not a guarantee of future results. The Trustee is not liable for losses, unless upon the willful default, evident bad faith or gross
negligence. Investors are advised to read the Declaration of Trust for the Fund, which may be obtained from the office of the Trustee, before deciding to invest. For inquiries, please call: (632) 845-5340, (632) 845-5286 or (632) 845-5799,
email [email protected] or visit www.bpiassetmanagement.com.
Figures as of 10/31/2013
1 Returns are net of fees. Past performance is not an indication of future returns. 2 Since Inception 3 On Oct. 1, 2012, the Fund’s benchmark was changed from HSBC Philippines Liquid Bond Index to
HSBC Local Currency Bond Index 4 Average daily NAV for the past 3 months.
*Plan Rules are available upon request.
Allocation Portfolio Composition: Government 57.19%, Corporates 2.14%, Cash 40.67%
Risk Disclosure
The Fund is suitable for investors who take medium to long-term views. As a marked-to-market
UITF, the Fund’s net asset value and total return may fall as well as rise as a result of stock
prices and interest rates movements. On redemption of units, an investor may receive an
amount less than the original amount of investment. Prior to investment in the Fund, the
investor shall undergo a client suitability assessment procedure to determine whether the Fund
is appropriate for him considering his investment objective, risk tolerance, preferences and
experience.
Any prospective investment shall be limited to the type of investments described in the
Declaration of Trust for the Fund.
5 The Information Ratio evaluates reward-to-risk efficiency relative to the benchmark, while the Sharpe
Ratio evaluates reward-to-risk efficiency relative to the risk free rate. The higher the number, the higher
the reward per unit of risk. Sharpe and Information Ratios between funds of different classifications are
non-comparable. 6 Trust fees/custodianship fees as a percentage of average daily NAV for the quarter. ⁷ External Audit Fees as a percentage of 2011 end-year NAV
⁸ Net of Tax
Risk Management
In accordance with the provisions in the Declaration of Trust, the Fund employs a risk
management policy based on duration. Duration measures the sensitivity of NAVpu to interest
rate movements. As interest rates rise, bond prices fall. The higher the duration, the more
NAVpu will fluctuate in relation to changes in interest rates. The Fund may also use financial
derivatives to hedge the portfolio against market and credit risks.
Top Holdings
Maturity Profile
1YR 2YRS 3YRS 4YRS 5YRS S.I.²
Fund 11.51 11.70 11.27 11.69 11.53 9.66
Benchmark³ 11.26 11.22 11.15 11.14 11.07 10.28
YTD 2012 2011 2010 2009 2008
Fund 8.97 9.22 14.84 12.88 7.09 0.28
Benchmark³ 8.56 8.86 14.89 11.44 6.88 2.73
150
180
210
240
270
300
Oct-08 Jan-10 Apr-11 Jul-12 Oct-13
Fund
Benchmark
37.82%
0.38%
2.11%
0.81%
14.21%
44.68%
Cash and less than 1 year
Between 1 and 3 years
Between 3 and 5 years
Between 5 and 7 years
Between 7 and 10 years
More than 10 years
